Expat wanderer

High prices, shortages pressure IS – Black markets abound – Strict social laws bad for business

BAGHDAD: Saadi Abdul-Rahman was recently forced to pull his three children out of school in the Iraqi city of Mosul, where Islamic State militants have ruled with an iron fist since June. The cost of living has soared there, and the family is barely able to make ends meet, even after putting the kids to work. “We are not able to pay for cooking gas, kerosene and food,” laments the 56-year-old retired government worker. “The situation in Mosul is miserable.”

The economy in the self-styled “caliphate” declared by the Islamic State group bridging Iraq and Syria is starting to show signs of strain. Prices of most staples have more than doubled as coalition airstrikes make it difficult for products to move in and out of militant strongholds, leading to shortages, price-gouging and the creation of black markets.

Resentment has grown among residents under the rule of the extremists, who initially won support with their ability to deliver services. In the early days of its rule, the Islamic State group subsidized food and gas prices through the wealth it accumulated from oil smuggling, extortion and ransom demands. They sold their smuggled oil at a discount – $25 to $60 a barrel for oil that normally cost $100 a barrel or more, according to analysts and government officials.

But in recent weeks, prices have soared in militant-held cities. Items like kerosene, used for heating and cooking, are in short supply, while others, such as alcohol and cigarettes, strictly banned by the group, are making a comeback at higher prices on the black market. Smoking is a punishable offense in militant-held Mosul. But at a warehouse on the outskirts of the city, cigarettes, as well as hard-to-come-by essentials like kerosene, can be found at hugely inflated prices on a black market run by the extremists. There, a pack of cigarettes sells for 30,000 dinars – the equivalent of $26 – more than double the pre-caliphate price, according to residents who spoke on condition of anonymity for fear of reprisals.

‘Unsustainable Economy’
The militants “are developing an unsustainable economy,” said Paul Sullivan, an expert on Middle East economies at the National Defense University in Washington. “Eventually the costs of keeping the subsidies and price controls going will overpower their smuggling funds, which are also used for offensive and defensive actions. They can collect taxes, extort money, and so forth,” he said. “But that will likely not be enough in the long run to keep such an unbalanced economic system going.”

In the Syrian city of Raqqa, the extremists’ so-called capital, the breakdown of security along the border with Iraq in areas under Islamic State control has led to flourishing trade with Mosul. Trucks are also able to access the city from Turkey, allowing for a steady supply of fruit and vegetables, wheat and textiles. However, the cost of living has surged since US-led airstrikes began in September, and power and water cuts grew more frequent, residents said.

In addition, the strict social laws imposed by the group have been very bad for business, said Bari Abdelatif, an activist in the Islamic State-controlled town of al-Bab in Syria’s northern Aleppo province. But, he said, foreign fighters were bringing with them lots of hard currency, making up somewhat for the shortfall. Last month, Abu Bakr Al-Baghdadi, the leader of the Islamic State group, decreed the minting of gold, silver and copper coins for the militants’ own currency the Islamic dinar – to “change the tyrannical monetary system” modelled on Western economies. But trade in most militant-held cities continues to be in Iraqi dinars and US dollars.

The start of winter has led to serious shortages of gasoline and kerosene. The official price for a liter of gas in government-controlled areas of Iraq is 450 dinars (40 cents) – but in Mosul, it sells for four times that. Two hundred-liter barrels of kerosene are now sold in Mosul for 250,000 dinars ($220), versus the official price of 30,000 dinars. In the western Iraqi city of Fallujah, under militant control for almost a year, residents have started cutting trees for firewood because kerosene is in such short supply. The city is surrounded by government troops and near-daily shelling often make parts of town too dangerous to visit.

Food and fuel prices have risen sharply as a result – a 50-kilo sack of rice costs 75,000 dinars ($65), up from 10,000 ($9) three months ago. A cylinder of cooking gas goes for 140,000 dinars ($115). That has put many staples out of reach for Abdul-Rahman and his family in Mosul, even with the additional money brought in by his sons, who left school to drive a taxi and work in a restaurant.

Decline in Business
A number of factors are driving the shortages and price hikes, according to residents in Mosul and Fallujah, the group’s biggest Iraqi strongholds. The militants have imposed a tax on vehicles entering their territory, leading to a decline in business. Deliveries are also subject to militant theft, and coalition airstrikes and military operations make many roads impassable. As a result, the trip from the Turkish border to Mosul took four hours prior to the militant takeover. Now, a delivery truck can spend as much as a week traveling the same road, and will pay a tax of as much as $300 for entry into Mosul, residents said.

According to Luay Al-Khateeb, director of the Iraqi Energy Institute and a visiting fellow at the Brookings Doha Center, the population of the areas under Islamic State control in Iraq and Syria is 6.5 million to 8 million people. “They need 150,000 barrels (of crude) a day just to meet local consumption,” he said. “And that is the bare minimum to meet the demands for transportation, bakeries, power generation. That doesn’t mean they have access to such supply,” he added.

Last month, the militants shut down cell phone service in Mosul, claiming that residents were tipping off US-led airstrikes to their whereabouts. Cell signals have not been restored, causing the city to come to a virtual standstill. Workshops, factories and markets are closed and bitterness is growing among business owners. “Most money-transfer operations are done by mobile calls,” said Osama Abdul-Aziz, the owner of a money-transfer office in Mosul. “We have the option of using the Internet, but this method is very slow and sometimes the Internet does not work at all, which causes big delays to our work.” At Mohammed Abdullah’s shop in Mosul, the pile of cell phone scratch cards is growing higher by the day. “Our business and means for living are in ruins now,” he said. – AP

I was told – by Saudi women, Qatari women and Palestinian women of faith, that Allah wants women to be educated. The first wife of Muhammed was a businesswoman and a prominent leader in her time. Perhaps the ISIS extremists need to spend a little more time reading the Qu’ran and hadith.

BAGHDAD (AP) — Militants with the Islamic State group tortured and then publicly killed a human rights lawyer in the Iraqi city of Mosul after their self-proclaimed religious court ruled that she had abandoned Islam, the U.N. mission in Iraq said Thursday.

Gunmen with the group’s newly declared police force seized Samira Salih al-Nuaimi last week in a northeastern district of the Mosul while she was home with her husband and three children, two people with direct knowledge of the incident told The Associated Press on Thursday. Al-Nuaimi was taken to a secret location. After about five days, the family was called by the morgue to retrieve her corpse, which bore signs of torture, the two people said, speaking on condition of anonymity because of fears for their safety.

According to the United Nations Assistance Mission in Iraq, her arrest was allegedly connected to Facebook messages she posted that were critical of the militants’ destruction of religious sites in Mosul. A statement by the U.N. on Thursday added that al-Nuaimi was tried in a so-called “Sharia court” for apostasy, after which she was tortured for five days before the militants sentenced her to “public execution.” Her Facebook page appears to have been removed since her death.

“By torturing and executing a female human rights’ lawyer and activist, defending in particular the civil and human rights of her fellow citizens in Mosul, ISIL continues to attest to its infamous nature, combining hatred, nihilism and savagery, as well as its total disregard of human decency,” Nickolay Mladenov, the U.N. envoy to Iraq, said in a statement, referring to the group by an acronym. The statement did not say how she was killed.

Among Muslim hard-liners, apostasy is thought to be not just conversion from Islam to another faith, but also committing actions that they believe are so against the faith that one is considered to have abandoned Islam.

Mosul is the largest city held by the Islamic State group in the self-declared “caliphate” it has carved out, bridging northern and eastern Syria with northern Iraq. Since overrunning the once-diverse city in June, the group has forced religious minorities to convert to Islam, pay special taxes or die, causing tens of thousands to flee. The militants have enforced a strict dress code on women, going so far as to veil the faces of female mannequins in store fronts.

In August, the group destroyed a number of historic landmarks in the town, including several mosques and shrines, claiming they promote idolatry and depart from principles of Islam.

Al-Nuaimi’s death is the latest in a string of attacks by the militant group to silence female activists and politicians. In July in the nearby town of Sderat, militants broke into the house of a female candidate in the last provincial council elections, killed her and abducted her husband, the U.N. said. On the same day, another female politician was abducted from her home in eastern Mosul; she remains missing.

Hanaa Edwer, a prominent Iraqi human rights activist, said at least five female political activists have been killed in recent weeks by the Islamic State group in Mosul, including al-Nuaimi, who Edwer said was also running for a seat on the provincial council.

“But it is not just women being targeted,” Edwer said. “They will kill anyone with a voice. It is terrifying.”

The Gulf Center for Human Rights said Wednesday that al-Nuaimi had worked on detainee rights and poverty. The Bahrain-based rights organization said her death “is solely motivated by her peaceful and legitimate human rights work, in particular defending the civil and human rights of her fellow citizens in Mosul.”

The Islamic State extremists’ blitz eventually prompted the United State to launch airstrikes last month, to aid Kurdish forces and protect religious minorities in Iraq.

This week, the U.S. and five allied Arab states expanded the aerial campaign into Syria, where the militant group is battling President Bashar Assad’s forces as well as Western-backed rebels. Despite making gains in some of the country’s more isolated areas, where airstrikes have paved the way for successful ground operations by Kurdish and Iraqi forces, the cities of Mosul and Fallujah remain major strongholds of the group, which has buried itself among large civilian populations.

The militant group recently killed 40 Iraq soldiers and captured 68 near Fallujah and then paraded their captives through the city in a show of brawn.

Nearly a dozen countries have also provided weapons and training to Kurdish peshmerga fighters, who were strained after months of battling the jihadi group.

In other developments Thursday, German Defense Minister Ursula von der Leyen visited northern Iraq for talks with Kurdish leaders about the fight against Islamic State extremists and Berlin’s efforts to help with arms deliveries.

Thursday also marked the start of German arms deliveries to the semi-autonomous Kurdish region, with the ultimate goal of supplying 10,000 Kurdish fighters with some 70 million euros ($90 million) worth of equipment.

“We are involved with relief shipments and the airlift, but we know that this is not sufficient,” said von der Leyen. “Much more is needed to get these (millions of people) through the winter.”

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Associated Press writer David Rising in Berlin and Bram Janssen in Irbil and an Associated Press reporter in Mosul contributed to this report.